ROBIN SHORT: A playoff run spilling red ink

Not that Danny Williams is complaining, but a new deal with Mile One is a must to keep AHL in the city

The St. John’s IceCaps’ march through the Calder Cup playoffs was an expensive parade, one that could have been even pricier, oddly enough, had the IceCaps gone to Game 7 and won the whole enchilada.Alas, the team came up a bit short, falling in five games to a very good Texas Stars group which celebrated on Mile One ice Tuesday night.So the party’s over. The lights are on, it’s cleanup time and in the case of this marvelous run through the American Hockey League’s post season, time to pay the bills.And they’re hefty. As in 350 large.

St. John’s IceCaps president and CEO Danny Williams

Good thing the IceCaps played before sellouts at home — just as they’ve done since Day 1, making it 133 games in a row and counting (playoffs included) — with a bunch of corporate partners onside.

“Nobody in the city would think we lost money in the playoffs,” said The Boss, “but in the fact the numbers are going to translate to a loss.

“And if we had gone back to Texas for Game 6,” Danny Williams continued, “it would have been over $500,000. And if we’d won the Calder Cup, because of the resulting expenses involved with that, it would have been closer to $700,000.”

Okay, so it’s about this point where the online comments section blows up. Cue the peanut gallery.

There can be no question the IceCaps are turning a buck, but the president and CEO is quick to credit the sellout crowds and corporate support for the team being in the black.

How long those turnstiles keep spinning at Mile One is anyone’s guess. All pro teams, especially those in minor pro, go through the ebb and flow of full houses and half-empty buildings (Wilkes-Barre/Scranton holds the sellout record, but saw one-quarter of the seats empty at the Mohegan Sun Arena in the post season). So Williams maintains if St. John’s is to land another team when the IceCaps bolt for Winnipeg at the end of next season, restructuring will be needed and it begins with the IceCaps’ lease with Mile One.

“The rental agreement we have is by far the highest in the league,” he was saying this week, “so there has to be some relief there.

“There’s not even a possibility of getting another team if there isn’t 50 per cent relief in that rental fee.

“That has to happen. There’s no other way it can work.”

We’re now inside a year of the Jets pulling up stakes in St. John’s and bringing the farm closer to home, as in down the hall at Winnipeg’s MTS Centre. And there are no real replacements lined up. Possibilities, no question, but another AHL team for St. John’s beyond 2014-15 is, at best, a flip of the coin right now.

If Williams were to purchase an existing AHL franchise — and the going rate is said to be around $5 million — and lure an NHL team to St. John’s, there’s an accompanying franchise fee which comes with that, which figures to be anywhere from $1 million to $1.5 million.

Throw in the fact St. John’s — as part of its agreement to join the AHL three years ago — has to pick up airfare for incoming teams, the profit margin narrows exponentially.

“The basic premise is if we continue to sell out every game, it is viable and we make profit,” he said. “If that (capacity) number slips to 80 per cent — and that’s 5,000 fans, which is pretty good — we lose money.

“You can’t have a financial model for five to 10 years based on 100 per cent attendance. You can’t do it. You have to assume there is going to be some dropoff. It’s only now with the support we’ve received that we’re able to have enough revenue to offset these expenses.”

Franchise fees and affiliation fees are what they are. The agreement with Mile One, Williams says, needs a deep massage.

“I’m basically saying to Mile One that if that rent doesn’t come down, that total compensation doesn’t come down by 50 per cent, it’s not even a consideration (of the AHL operating in the rink beyond 2015).

“What Mile One has to take into consideration is all the spinoff the downtown is getting because of the IceCaps ... basically 50 games, which is a lot of nights. Not to mention the extra $3 million to $4 million of new revenue coming to that centre as a result of us being there.

“If we did not have the fan support or the corporate support, it’s not even close.”

But what about these playoffs, this run to the league final that resulted in 11 extra home games?

For starters, the league takes about half of the revenues from each team to support operations and supply a players’ fund. For the IceCaps, travel costs are jacked up because teams fly charters in the post season. In the days of the old St. John’s Maple Leafs, the AHL picked up the tab for charters, but in the case of the IceCaps, the regular season travel agreement carries over to the playoffs.

So airfare, hotels and per diems this spring cost the IceCaps upwards of $1.2 million.

“And out of that playoff exercise, Mile One made an extra $500,000-plus in revenues.

“The league gets what it gets because that’s the deal with the AHL. The travel, well, we’re stuck with it. But Mile One? We went to Mile One and asked if they could give us some special considerations because of the extra travel costs. I mean, we want our team to travel as expeditiously as they can because it gives them the best shot at winning.

“Mile One just said no. Nothing.”

Thing is, Williams would have paid a million bucks if it meant a Calder Cup for St. John’s. He’s a hockey guy to the core, who attributes much of his personal success to the game, from relationships forged from the days he was part of the St. John’s Capitals’ front office in the early ’70s with people like Terry Trainor and Don Johnson.

It’s why watching Texas win the league title on home ice hurt that much more.

“The thing is,” he said, “I can’t say enough about our guys. They played hard, they played hurt. They were a credit to the city.”

Williams still has the passion — not to mention interest — in hockey, even with all the other things on his plate, not the least of which is the massive, $5 billion Galway development near Southlands.

But that affection will only go so far.

“Nobody is going to throw tens of millions of dollars just to have a team,” he says. “All I’m ask for is fairness. This team is a success because we run it well, and we have the fan and corporate support. If we weren’t running it properly, with a rink half-full, it wouldn’t last.”

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Recent comments

Bill

June 24, 2014 - 07:09

Only a handful of people in the St. John's region attend games. Ticket prices have to cover the costs. The public cannot be expected to subsidize hockey games by supporting low prices or operating Mile One at a loss.

If sell outs for every game don't make the team profitable, it's time to cut loose.
Danny says The Mile One lease agreement is the most expensive in the league so they want a comparable deal, well I will want a comparable deal on my electricity rates when the deal I'm getting is the most expensive in the country come 2017.
Or maybe just ask the AHL for a break on your contributions to them instead of teh taxpayers of St. John's & Mile One

Robin clearly pointed out that the Ice Caps are indeed making a profit thanks in large part to sellouts, but Williams pointed out that they can't forecast based on 100% attendance all the time for the next ten years. If they don't continue to sellout they may be looking at a loss. And nowhere in the article does it mention Williams looking for taxpayer money.

Just NO

June 21, 2014 - 08:25

So what Williams and the writer are saying is that without public subsidy, it isn't possible to profit in the professional hockey business in NL. Guess what, either is professional baseball, basketball, and a host of other sports. My memory isn't that short that I can't remember Williams telling the province that he needed almost a million in public money to get the team here in the first place. It wasn't given, and he still turned a profit. Keep you hands out of my pockets Mr. Williams, build your own rink in your new subdivision if you're that intent on owning a hockey team, you're subsidized enough by the general public already.

I feel Danny Williams has done more then enough to bring a good AHL hockey team to the city. The benefits in monetary return to the city are enormous. The City of St. John's and Mile One cannot afford to lose hickey.
My question is, who picks up the lost revenue at Mile One if we don't have a hockey team from the AHL ?? I think the answer is obvious, it will be passed onto the taxpayer by the City Council. If council can't afford to reduce the cost $500,000 to keep a team here, then what are they doing pumping tens of millions into an extension into the conference centre. Doc O'Keefe will rebut by saying , Oh we have no control over Mile One." That is nonsense. I think it is well worth reducing the rental fee by $500,000 to keep a team i the city. The benefits outweigh the cost.

No Robin, the peanut gallery has a lot more on the go than this. Everyone knows there is no money in hockey, and it's OIL WEEK. When Newfoundland finds its identity, people will see it for what it is. Should I feel bad for a bunch of playboys, while I work from our lovely island facing the same economy? AHL can exist without Mile One, and become a more family affair in a better building. I won't throw peanuts at Daniel Tiger, only to say, build it and they will come. Rent it, and well ,he can fill you in on how that go him in the red. Can't afford a mortgage to build? No shame in that man, welcome to the club. If franchise, league fees, are what they are, then we are not in their AHL market.